Economic Growth Disparities in Asia
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This document summarizes 10 patterns that govern intra-country growth disparities in South Asia: 1) substantial youth populations, 2) fast urbanization and agglomeration, 3) rising services sectors, 4) large informal sectors due to weak institutions, 5) disconnect from sustainability, 6) mediocre quality of factors of production, 7) low levels of inclusiveness, 8) lack of participatory approaches, 9) low redistribution, and 10) trade hindered by inefficient infrastructure. It notes emerging megatrends of empowerment, demographic change, and new power centers, as well as potential game changers like conflicts, disasters, corruption, and failures to invest in human capital. It calls for rethinking South
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Economic Growth Disparities in Asia
- 1. Managing Intra-country Growth Disparities in South Asia Abid Q. Suleri, Vaqar Ahmed, Muhammed Zeshan, Samavia Batool 6th South Asia Economic Summit 2-4th September, Institute of Policy Studies, SriLanka
- 2. 10 Patterns Governing Intra-country Growth Disparities
- 3. 1. Substantial Population Share of Youth Country Population ages 15-64 (% of total) Population ages 0-14 (% of total) Afghanistan 50.3 47.4 Bhutan 66.8 28.5 Bangladesh 64.7 30.6 Nepal 59.4 35.6 Pakistan 61.3 34.3 India 65.4 29.4 Sri Lanka 66.6 25.2 Maldives 66.0 29.0 Source: World Development Indicators 2013 Population and Youth in South Asia (2012)
- 4. 2. Fast Urbanization & Agglomeration Country Urban population (% of total) Population in urban agglomerations of more than 1 million (% of total population) Afghanistan 23.9 10.7 Bhutan 36.3 - Bangladesh 28.9 14.9 Nepal 17.3 - Pakistan 36.5 19.2 India 31.7 12.7 Sri Lanka 15.2 - Maldives 42.2 - Source: World Development Indicators 2013 Urbanization and Agglomeration in South Asia (2012)
- 5. 5 -4 -2 0 2 4 6 8 10 12 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Percentage South Asia Real GDP Growth -2 0 2 4 6 8 10 12 14 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Percentage Manufacturing, value added (annual % growth) -15 -10 -5 0 5 10 15 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Percentage Agriculture, value added (annual % growth) 0 2 4 6 8 10 12 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Percentage Services, value added (annual % growth) 3. Rising Share of Services Sector Source: World Development Indicators 2013
- 6. 4. Informal Sector Fueled by Porous Institutions Source: World Development Indicators 2013 2.5 3.9 2.9 3 3.6 3.4 3.4 3 0 1 2 3 4 5 CPIA public sector management and institutions rating (1=low to 6=high) 1.5 3.5 3 2.5 3.5 3.5 3.5 3 0 1 2 3 4 CPIA property rights and rule-based governance rating 2012 (1=low to 6=high) 2 4.5 2.5 2.5 3.5 3 3 3 0 1 2 3 4 5 CPIA transparency, accountability, and corruption in the public sector rating 2012 (1=low to 6=high) 45 19.9 46.6 12.4 47.4 49.4 0 10 20 30 40 50 60 Afghanistan Bhutan Bangladesh Pakistan Sri Lanka Nepal %ofTotalFirms Firms competing against unregistered firms 2009
- 7. 5. Disconnect with Sustainability 17 31 0 5 10 15 20 25 30 35 South Asia World Percentage Forest area (% of land area) 0.23 0.60 0.34 0.13 1.66 0.62 3.21 0.95 0 1 1 2 2 3 3 4 (metrictonspercapita) CO2 Emissions 2009 1972 Source: World Development Indicators 2013
- 8. 6. Mediocre Quality of Factors of Production Source: World Development Indicators 2013 16.8 19.9 17.5 5.6 24 18 0 10 20 30 Bangladesh Pakistan India Maldives Sri Lanka Nepal (% of population) Prevalence of undernourishment 2011 72.7 36.7 42 59.2 47.2 9.2 10.5 39 0 20 40 60 80 Afghanistan Bangladesh Bhutan Pakistan India Maldives Sri Lanka Nepal Infant mortality rate 2011
- 9. 6. Mediocre Quality of Factors of Production Source: World Development Indicators 2013 16.8 19.9 17.5 5.6 24 18 0 10 20 30 Bangladesh Pakistan India Maldives Sri Lanka Nepal (% of population) Prevalence of undernourishment 2011 72.7 36.7 42 59.2 47.2 9.2 10.5 39 0 20 40 60 80 Afghanistan Bangladesh Bhutan Pakistan India Maldives Sri Lanka Nepal Infant mortality rate 2011 3.1 70.2 133.5 26.6 168.7 27.0 0 50 100 150 200 (per1,000adults) Borrowers from commercial banks 2011 0 1 2 3 4 Afghanistan Bhutan Bangladesh India Pakistan Maldives Sri Lanka New Firm registrations per 1,000 people
- 10. 7. Low Levels of Inclusiveness Source: World Development Indicators 2013 GINI index Income share held by highest 10% Income share held by lowest 10% Poverty headcount at $2/day (% of Population) Afghanistan 27.82 23.21 4.08 - Bhutan 38.06 29.36 2.8 29.8 Bangladesh 32.12 27.03 3.9 76.5 Pakistan 30.02 26.05 4.36 60.2 India 33.9 28.79 3.69 68.8 Sri Lanka 36.4 30.03 3.39 23.9 Maldives 37.37 28.03 2.71 12.2 Nepal 32.82 26.52 3.63 57.3
- 11. 8. Lacking Participatory Approach Source: World Development Indicators 2013 2 4 3.5 2.5 3 4 4.5 4 0 1 2 3 4 5 CPIA gender equality rating 2012 (1=low to 6=high) -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 Voice and Accountability Index 2011 (1=low to 6=high)
- 12. 9. Low Redistribution 12 Source: World Development Indicators 2013 8.8 10.0 9.2 9.3 10.4 10.7 12.4 13.2 0 2 4 6 8 10 12 14 %ofGDP Tax Revenue in South Asia 2011 -0.9 -1.3 0.4 -5.1 -3.3 -11.7 -7.2 -1.2 -14 -12 -10 -8 -6 -4 -2 0 2 %ofGDP Average Budget Deficit 2006-10 7.9 8.3 7.1 12.1 8.8 8.8 10.2 9.3 0 5 10 15 %Growth Average Consumer Price Index 2006-12 3.5 3.5 3 3.5 3.5 4 3 2.5 0 1 2 3 4 5 CPIA quality of budgetary management 2012 Rating (1=low to 6=high)
- 13. 10. Trade under Inefficient Infrastructure Note: (1=low to 5=high) Source: World Development Indicators 2013 Efficiency of customs clearance process Quality of trade and transport-related infrastructure Competence and quality of logistics services Afghanistan 2.33 2.0 2.16 Bhutan 2.29 2.3 2.42 Bangladesh 2.33 2.49 2.44 India 2.77 2.87 3.14 Pakistan 2.85 2.69 2.77 Maldives 2.24 2.47 2.68 Sri Lanka 2.58 2.5 2.8 Nepal 2.20 1.87 2.12
- 14. Summarizing Underlying Growth Patterns 14 1. Substantial Population Share of Youth 2. Unplanned Urbanization and Agglomeration 3. Rising Share of Traditional Services 4. Informal Sector Fueled by Porous Institutions 5. Disconnect with Sustainability 6. Mediocre Quality of Factors of Production 7. Low levels of Inclusiveness 8. Lack of Participatory Approach 9. Low Redistribution 10. Trade under Inefficient Infrastructure
- 15. 15 What Next for South Asia?
- 17. 1. Empowerment 17 Emerging examples of individual empowerment Rising Middle Class Independent Media Access to ICT Pro-poor legislation Right to Information Act
- 19. 3. New Power Centers 19 Power Centers Civil society Superior Judiciary Media Parliamenta ry Forces Corporate Sector
- 20. 20 Game Changers
- 21. 21 Game Changers Violent Conflicts Human & Man-made disasters Corruption & Transparenc y Failure to Invest in Human Capital
- 22. Lets Rethink South Asian Inclusive Growth 22 1. How will these game changers impact the mega trends? 2. Can rural development be separated from traditional structural transformation? 3. How urban spaces can become hubs of domestic commerce? 4. Can we reinvent youth engagement?